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The spreadsheet for this problem contains information about Kroger Company and four industry competitors in 2007. It is available at www.mhhe.com/higgins10e. (Select Student Edition > Choose a Chapter > Files.) Using this information,

a. Estimate the industry asset beta, weighting each company by its proportion of the sample total market value of equity.

b. Relever the industry asset beta to reflect Kroger's capital structure to estimate an industry-based equity beta for Kroger.

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